‘Consistency, clarity and cooperation’: Global green economy reacts to new ISSB standards
The International Sustainability Standards Board (ISSB) has issued its first two disclosure frameworks, which have been widely welcomed.
As promised back in February, the Board has today (26 June) issued two new standards as it works to develop a comprehensive international baseline standard for sustainability disclosures. The intention is to end the differentiation of disclosure reporting requirements and report quality between different nations and regions.
Both standards are the result of months of work, in partnership with policymakers, businesses and some of the world’s biggest existing sustainability reporting platforms and frameworks. The UK and Japan have already agreed to mandate disclosures in alignment with the standards; other nations are expected to follow suit later this year.
Here, we round up all the key reaction to the new standards from key green economy organisations across the globe.
CDP’s chief impact officer Nicolette Bartlett:
“The long-awaited global baseline standard for climate-related disclosure is an important step towards more transparency, accountability, and management of risk within financial markets. It will support companies and financial institutions to build resilience, creating an incentive for companies and their investors to improve their sustainability performance.
“The inclusion of Scope 3 emissions in the ISSB standard, announced at the end of 2022, is very welcome. Reporting of scope 3 emissions through CDP’s disclosure platform has been increasing for many years, but not as much as we need it to. CDP is confident that the inclusion of Scope 3 emissions in ISSB climate will drive more companies to disclose this important information.
“From next year, all companies disclosing through CDP (18,700 in 2022, worth half of global market capitalization) will be asked to disclose against the ISSB climate standard. This will enable simplified and streamlined reporting for companies, in turn providing data to a range of stakeholders in a way that is consistent and comparable across regions and regulatory requirements.
“To meet our global goals, it’s critical that this disclosure which focuses on climate-related financial risk is paired with disclosure that covers all corporate environmental impacts. CDP will continue to support companies to disclose this information alongside what is required by this new standard, as well as disclosure against all high quality global and jurisdictional-level standards, such as those being developed in the EU, the US, and across the world.”
Bloomberg LP’s vice chair for global public policy Mary Schapiro, also head of the TCFD secretariat:
“The global economy needs common reporting standards to reduce fragmentation and drive comparability in climate-related financial data. Built upon the foundation of the TCFD framework, the ISSB standards provide a global baseline for companies to disclose decision-useful, climate-related financial information – information that is critical for creating more transparent markets, helping achieve a smooth low-carbon transition, and building a more resilient and sustainable global economy.”
Persefoni’s chief global policy officer and associate general counsel Emily Pierce:
“The ISSB Standards offer a once-in-a-generation opportunity to catalyze comparable sustainability disclosures across the globe. The status quo is insufficient for investors and inefficient for companies. There are trillions of dollars of capital seeking sustainable investment opportunities. The ISSB standards will help companies speak the same language on sustainability issues across borders, allowing them to translate action into competitive advantage.
“On climate, the ISSB responded to the global call from investors who have made clear that Scope 3 is key, but it did not ignore companies’ concerns about the challenges. The ISSB standards present a balanced path forward to guide the markets towards better and more complete emissions disclosures, enabling investors and companies to make informed decisions as they navigate the transition to a decarbonizing economy.”
E3G’s associate director for sustainable finance, Kate Levick:
“Today’s launch of the ISSB standards comes at a critical moment for international action on sustainability and climate change. Market and regulatory awareness of the benefits of robust, credible private sector transition plans has skyrocketed in 2023, and the ISSB’s global baseline is a crucial piece of the architecture for their delivery.”
E3G’s senior specialist for sustainable finance, Elizabeth Jacobs:
“New international disclosure standards are not born every day. Real success will depend on jurisdictions’ willingness to align with the ISSB standards, prove their interoperability, elevate climate related disclosures that truly meet the needs of investors and issuers and support the transition to net-zero.”
EY’s global vice chair for sustainability, Steve Varley:
“The current global disparity in sustainability reporting makes clear our need for a common language and baseline for sustainability-focused disclosures, particularly regarding investments. Having worked with chief sustainability officers from around the world, both at EY and as co-chair of the S30, I’ve seen first-hand just how vital a harmonised approach is. The standards put forward by ISSB will give organisations freedom from ambiguity and opportunity to go further, faster.”
The World Economic Forum’s executive chair Klaus Schwab:
“The publication of the first two ISSB Standards represent a vital step forward in establishing a global baseline for sustainability reporting. Consistent and comparable sustainability information, paired with financial information, empowers investors and stakeholders to gain a comprehensive understanding of a company’s performance and their commitment to driving sustainable value creation. We look forward to our continued collaboration.”
The World Business Council for Sustainable Development’s executive committee chair Ilham Kadri:
“I commend and applaud the ISSB for issuing both the climate-related and the general requirements disclosures standards: companies and investors are in dire need to have a common language to report and value their climate and social sustainability strategies.”
UK Sustainable Investment and Finance Association (UKSIF) chief executive James Alexander:
“As a global leader on climate-related disclosure, the full, swift adoption by the UK government of the ISSB’s standards represents a natural, next step in the UK’s climate leadership. The government should now consult with the market, as soon as possible, on the full implementation of the ISSB’s standards across the economy. We look forward to engaging with the government to finalise an implementation timeline, as well as navigating the standards’ interaction with the UK’s upcoming economy-wide Sustainable Disclosure Requirements (SDRs) and other rules.”
European Round Table for Industry (ERT) Chair Jean-François van Boxmeer:
“Global alignment is crucial to provide a comprehensive and clear view of a company’s sustainability performance and to allow for the comparability of disclosures on a global level. Separate and differing sets of standards for sustainability reporting in different jurisdictions would lead to a de facto double reporting for preparers and, consequently, unnecessary additional costs and reduced validity and comparability for users.
“We therefore strongly encourage jurisdictions around the globe, including the EU, to take on board the ISSB standards and to integrate them into their own regulatory framework.”
Asian Development Bank managing director Woochong Um:
“We welcome the inaugural standards which deliver a global baseline of sustainability-related financial disclosures that have the potential to enhance Asian capital markets by attracting more investment and boosting private sector development in Asia. We encourage Asian Development Bank members to give their consideration to the adoption of the Standards.”
The Association of Chartered Certified Accountants’ (ACCA) chief executive Helen Brand:
“The launch of these first two global sustainability standards is an important and significant step forward in business reporting, providing a global baseline for comparable information on sustainability issues, which will help investors, financial markets and society more widely. The focus they provide will help drive the positive changes we need in the way businesses operate in the face of the threat from climate change.
“ACCA will continue to support the ISSB’s important work. The influence of the accountancy profession – with its members working inside and advising businesses across the world – means it has a hugely important role to play in creating a better, more sustainable world that works for everyone. Consistent global standards are a key part of that picture and we look forward to playing our role in driving their success.”
KPMG’s global head of audit Larry Bradley:
“This announcement from the ISSB marks the culmination of months of discussions and planning and it has the potential for a hugely positive impact on the planet. The world is facing a climate crisis that is already affecting the lives of millions of people. How business leaders respond to that crisis is crucial.
“At the heart of the ISSB’s strategy is greater global alignment and transparency to support effective capital markets – a consistent and comparable global baseline of disclosures. Now that we are clear on what the global baseline looks like, it’s incumbent on the leaders of all jurisdictions to support and adopt the standards.
“For business leaders, make the most of this momentous change and use the new standards to transparently demonstrate how your company is performing in reacting to the challenges that climate change brings. I believe that climate risk is business risk. For years, the world’s decision-makers have been pushing for consistency, clarity and cooperation. That moment has arrived and it’s time for us all to make it work.”
PwC UK’s global lead for public policy and regulation, Gilly Lord:
“Clear and widely adopted reporting standards are a vital part of any plan to strengthen trust in corporate disclosures around sustainability, including climate change. So today’s publication by the ISSB marks a major step towards providing stakeholders and management with the information they need to make better informed, more effective, decisions. It will be far easier to directly compare businesses, knowing that they are reporting against the same definitions and standards.
“With so many global businesses soon required to report on sustainability as a result of the EU’s Corporate Sustainability Reporting Directive (CSRD) and other regulatory changes, these standards are urgently needed. It is welcome that the ISSB is working to make sure its standards are aligned with these emerging legal requirements and that the EU is committed to being clear where CSRD requires additional disclosures beyond the ISSB standards. It is also encouraging that the International Auditing and Assurance Standards Board is developing a profession-agnostic, global assurance framework for sustainability-related corporate reporting and we look forward to its upcoming public consultation.
“However, there is a need to go further on at least two dimensions. First, high-quality standards alone are not enough. Companies need to use them to produce high-quality sustainability reports. It is important that investors, jurisdictions, listing authorities, companies and others consider how to incentivise adoption so there is a level playing field of comparable information.
“Second, climate change is a crucial issue, but it is not the only area where investors and stakeholders need more reliable, comparable disclosures of non-financial information. So we encourage the ISSB to pursue its plan to go beyond climate and prepare standards with specific disclosure requirements focused on other sustainability areas.”
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